US consultant to verify ONGC-RIL claims over Krishna-Godavari gas

17 Jul 2014


The Directorate General of HydrocarbonsThe Directorate General of Hydrocarbons on Wednesday announced the appointment of Texas-based DeGolyer and MacNaughton (D&M), an international petroleum consultant, to assess Oil and Natural Gas Corp's (ONGC) claim that Reliance Industries Ltd, which operates an adjacent gas block, is drawing gas from its east coast fields.

State-owned oil explorer ONGC and Reliance Industries have been at odds over their Krishna Godavari basin gas blocks being inter-connected.

ONGC says at least three wells drilled by RIL on the boundary of KG-D6 block in Bay of Bengal are within "few hundred meters" of its gas fields. It fears that RIL might be drawing out its gas.

The Directorate General of Hydrocarbons on Thursday conveyed to ONGC the decision to appoint the common international expert to resolve the dispute.

DCH wanted the two sides to resolve the issue across the table, as these are natural geological concurrences and not man-made boundaries.

After a series of meetings, ONGC and RIL finally agreed to appoint an independent consultant to resolve the dispute.

Two consultants, D&M and Gaffney, Cline & Associates (GCA), were shortlisted from the four global experts identified, according to sources.

Both the consultants have worked with Indian oil and gas companies on exploration activities and reserve assessments in the past.

ONGC had, in May, moved the Delhi High Court alleging that RIL was drawing natural gas from its fields in the KG-DWN-98/2, which are adjacent to the latter's gas-producing D6 block in the Krishna Godavari basin (See: ONGC takes RIL to court over 'stealing' of its Krishna-Godavari gas).

ONGC said it would pursue the case even while the experts are assessing the claims made by the state-run explorer.

If the connectivity claim is proved, RIL would have to share gas from its block with ONGC and the allocation would be made on a pro-rata basis.

Technical teams of ONGC and RIL have been engaged in assessing the connectivity of the two blocks and ONGC had sought government data on the RIL-operated KG-D6 block, to study the continuity of the reservoir. However, the technical teams of the two companies could not reach any conclusion so far.

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